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Drivers of Farmers' Income: The Role of Farm Size and Diversification

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  • Varun Kumar Das
  • A. Ganesh Kumar

Abstract

The study finds that a U-shaped relationship exists between farm size and farm / farmer's income. The results also show that both on-farm and off-farm diversification have an inverted U-shape relationship with farm / farmer's income. That is, diversification up to some level helps improve income but excessive diversification might lead to misallocation of resources and hence a fall in income. The results also show that engagement in public works programme such as MGNREGA has an adverse impact on farm / farmer's income, possibly due to the opportunity cost of time spent in such programmes. Finally, positive effect of education on income is seen only at somewhat high education levels.

Suggested Citation

  • Varun Kumar Das & A. Ganesh Kumar, 2017. "Drivers of Farmers' Income: The Role of Farm Size and Diversification," Working Papers id:12104, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:12104
    Note: Institutional Papers
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    References listed on IDEAS

    as
    1. Deepak Varshney & Deepti Goel & J. V. Meenakshi, 2018. "The Impact of MGNREGA on Agricultural Outcomes and the Rural Labour Market: A Matched DID Approach," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(4), pages 589-621, December.
    2. Mishra, Srijit, 2008. "Risks, Farmers’ Suicides and Agrarian Crisis in India: Is There a Way Out?," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 63(1), pages 1-17.
    3. Monchuk, Daniel C. & Deininger, Klaus W. & Nagarajan, Hari K., 2010. "Does Land Fragmentation Reduce Efficiency: Micro Evidence from India," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61652, Agricultural and Applied Economics Association.
    4. Michler, Jeffrey D. & Josephson, Anna L., 2017. "To Specialize or Diversify: Agricultural Diversity and Poverty Dynamics in Ethiopia," World Development, Elsevier, vol. 89(C), pages 214-226.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Farm size; farm income; farmer's income; on-farm / off-farm diversification; U-shaped relationship; resources; public works programme; MGNREGA; opportunity cost; EDUCATION; high education levels.;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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